After rejecting her attempts to keep the city’s mill rate the same, and further rejecting counting as revenue the sale of two schools, Mayor Nancy Rossi came out swinging this week, saying she and the state panel overseeing city finances are far from an agreement as to how the city’s five-year plan should be implement. Rossi, who has been cautious in her comments regarding the Municipal Accountability Review Board (MARB) since it was empaneled right after she took office, spared no criticism.
At issue was the .42-mill increase imposed by the MARB on taxpayers. That will put the mill rate at 36.68 mills before fire taxes.
Earlier this year, the MARB approved the five-year plan after many months of negotiations with the Rossi administration. The document took so long to finalize because the city and MARB could not agree on revenue projections and sources, according to the mayor.
“My administration and the City Council approved a budget with no tax increase. We cannot tax ourselves out of this situation-we are already taxed too high,” she said.
MARB indicated during the negotiations and beyond that it expects the city mill rate to incrementally increase to 40 mills over the term of the five-year plan. The panel believes the increases are needed to allow the city the working capital it needs to operate. With the committee having all the cards, including funds that will keep the city afloat over the next two years, she was forced to agree.
The city came under the review of MARB in December 2017 after the O’Brien administration bonded for the cumulative operating budget deficit of more than $16 million. The bonding triggered the oversight of the state board under an act of the General Assembly that had been passed that year. Only two municipalities are under the agency, the other being Hartford.
The city suffered from the 2017 state budget, when after months of negotiations, money expected from Hartford never came through, putting an $8 million hole in the last O’Brien budget. The city expects to get pro-rated funding over the next two years – this year $4.1 million – in order to plug the gaps. The tax increases are to make those plugs permanent.
Whether the five-year plan should be a flexible documents or set in stone is one point of contention between the panel and Rossi.
“The five-year plan should be a roadmap forward and the MARB did not want to include the full value of tax revenue for economic development projects that will begin and be completed within the next five years,” Rossi said. “They took a conservative approach to planning revenue for those out years—and I completely agree.”
However she indicated tax increases should be tempered with the cuts and revenues the city is to gain over the term of the five-year plan.
“The city also reduced expenditures with the elimination of positions and programs and the freezing non-essential overtime and spending. More than $2 million was cut from the annual operating budget so far. The five-year plan should be a ‘fluid and living document’ that is adjusted annually as the city grows its commercial base and grand list,” she insisted.
“As the grand list grows the revenue that is derived should be included in the city budget and the five-year plan updated to reflect that revenue resulting in the elimination of any proposed tax increases,” she said,” she said.
While she admitted the annual variation in the grand list is not an exact science, she believes increases in the grand list should be reflected in whether the city imposes new taxes.
“Yes, the 5-year plan does include tax increases because we don’t know the exact value and increases in the grand list. As the development projects begin and progress, the five-year plan must be adjusted and the proposed tax increases removed,” she said.
She said the administration is working hard to push development projects forward and to market the city.
”Our community is growing we have been successful in advancing projects and attracting new business, but we cannot continue to raise taxes and expect to be competitive with other communities in the region,” she said..
The MARB included in the approved five-year plan state restructuring funds because of the hole left by the 2017 budget difficulties.. The first year grant was $8 million and the upcoming year that begins on July 1, the grant has been reduced to $4.1 million. The five-year plan included $6 million but it was reduced to $4.1 million after the city ran two consecutive budget surpluses and the MARB recognized the city was ahead of the recovery plan. The restructuring grant funding will phase out after fiscal year 2022.
“My administration will continue to work with developers to move projects forward and market the city for new business. As the city’s grand list grows and generates additional revenue, the MARB needs to allow adjustments in the five-year plan to provide relief to our taxpayers,” Rossi said.
She said while she wants to work with MARB in putting the city back on its feet, she cannot agree with the rigidity of the plan as it is set down.
“We want to work with the MARB and I respect and appreciate their efforts on behalf of the city, but we need to work together and they should better grasp the impact of their actions on our community. West Haven residents cannot afford any new tax increases and I will not apologize for disagreeing with the MARB and I will continue to fight for our community throughout our recovery. We are on the right path but need some flexibility to do what is right for West Haven,” she said.